Before the Court are Class Counsel’s petition for an award of attorneys’ fees and reimbursement of expenses [613], Schreiber Foods, Inc.’s (“Schreiber”) sealed motion for Rule 11 sanctions [676], and Schreiber’s amended bill of costs [694]. Ancillary to these motions are Defendant Dairy Farmers of America’s (“DFA”) motion for leave to file a response to the Direct Purchaser Plaintiffs’ reply memorandum in further support of Class Counsel’s fee petition [649], and Direct Purchaser Plaintiffs’ motions for leave to file a surreply in further opposition to Schreiber’s motion for Rule 11 sanctions [703] and to seal exhibit 1 to that motion [701].
For the reasons stated below, the Court grants Class Counsel’s fee petition [613], awarding them one-third of the $46 million common fund ($15,333,333.33) with interest thereon at the same rate paid on the Settlement Fund, plus $488,491.24 in costs and expenses. The Court grants DFA’s motion for leave to file a response to Direct Purchaser Plaintiffs’ reply memorandum in further support of Class Counsel’s fee petition [649]. The Court denies Schreiber’s motion for Rule 11 sanctions [676]. The Court grants in part and denies in part Direct Purchaser Plaintiffs’ motion to file a surreply [703] and Direct Purchaser Plaintiffs’ motion to file exhibit 1 to their surreply under seal [701], granting Plaintiffs leave to file only the exhibits to their motion to file a surreply, which will remain under seal on the Court’s docket as currently filed. Finally, the Court grants Schreiber’s bill of costs [694], and awards it $32,215.23.
I. Factual Background
A more complete factual and procedural history can be found in this Court’s order granting Schreiber’s motion for summary judgment. [652, available at In re Dairy Farmers of Am., Inc., Cheese Antitrust Litig.,
A. Direct Purchaser Plaintiffs’ Settlement with DFA
Direct Purchaser Plaintiffs filed their first class action complaint against various DFA-related defendants on March 13, 2009. After a heavily-briefed motion-to-dismiss phase, Judge Hibbler (to whom this case previously was assigned) allowed certain of Plaintiffs’ claims to proceed [see 141 (Feb. 4, 2011) ], after which the parties began engaging in a series of settlement discussions and proceedings. On or about March 18, 2012, Plaintiffs and DFA agreed to a payment of $46,000,000 in cash as consideration for a proposed settlement (the “Settlement Fund”). [634, ¶ 6.] It was approximately one year later that Direct Purchaser Plaintiffs moved for preliminary approval of the settlement [327 (Mar. 21, 2013) ], which the Court granted on
B. Schreiber Foods, Inc.
Three years after filing their first class action complaint against DFA — and just weeks prior to reaching an agreement regarding the monetary component of their settlement with DFA — Direct Purchaser Plaintiffs filed a second amended consolidated class action complaint, adding Schreiber as a defendant. [245 (Mar. 22, 2012).] Approximately six weeks later, on May 9, 2012, Schreiber’s counsel sent a letter to Class Counsel, claiming that Plaintiffs had no reasonable basis for the factual allegations in their complaint and requesting that Plaintiffs withdraw their complaint, citing the sanctions provision of Federal Rule of Civil Procedure 11(c)(2). [688, ex. A.] Five days after sending this letter, Schreiber moved to dismiss Plaintiffs’ complaint [265], which the Court granted in part and denied in part on January 18, 2013[314]. Then, after a year’s worth of discovery transpired, Schreiber moved for summary judgment [430 (Dec. 13, 2013) ], which the Court granted [652 (Aug. 18, 2014) ]. Prior to the Court’s ruling on Schreiber’s motion (but while the motion was still pending), Schreiber’s counsel sent another letter to Class Counsel [see 676-1, ex. A (Mar. 19, 2014) ], reiterating its Rule 11 objections and attaching a draft of its Rule 11 motion for sanctions. Schreiber filed an amended version of its Rule 11 motion shortly after its victory on summary judgment. [See 673 (Sept. 18, 2014).] Schreiber also filed a bill of costs, seeking reimbursement of fees as the prevailing party. [679; revised at 694.]
Prior to being sued by Plaintiffs, Schreiber purportedly was the largest member of the settling class. [See 619, at I.] But Schreiber was not officially a class member at the time of Plaintiffs’ settlement with DFA; as of March 23, 2012, Schreiber was a named defendant in this action, and thus arguably excluded, at least in part, from participating as a class member. As the Court noted in its summary judgment order, this straddling of the line between class member and defendant put Schreiber in an uncomfortable position, having to wear both its class member hat and its defendant hat simultaneously. After prevailing on its motion for summary judgment, Schreiber looked to end any disputes regarding its right to participate as a class member, moving the Court for such a declaration. [654 (Motion for Order Declaring Schreiber a Class Member).] The Court granted Schreiber’s motion, leaving no dispute that Schreiber currently is a member of the settling class. [See 670, at 1 (“Schreiber is no longer a defendant in this action and, pursuant to the notice to the Class dated March 17, 2014, is fully able to participate as a Member of the Class * * *.”).]
II. Analysis
A. Class Counsel’s Fee Petition
“In a certified class action, the court may award reasonable attorney’s fees * * * that are authorized by law or by the parties’ agreement.” Fed.R.Civ.P. 23(h). To determine the reasonableness of
There are two predominant methods for calculating reasonable attorneys’ fees in this district. The first is via the “lodestar” method, which considers “the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart,
1. The Terms of the Parties’ Agreement
If possible, it is preferable to establish a fee structure at the outset of a lawsuit. See Silverman,
2. Market Rate: Fee Awards in Other Common-Fund Cases
As a barometer for assessing the reasonableness of a fee award in common-fund cases, courts look to the going market rate for legal services in similar cases. Synthroid I,
Coincidentally, the Seventh Circuit has delineated a seemingly tailor-made tiered-pricing arrangement for a $46 million settlement fund (as we have here), where the class counsel received 30% of the first $10 million, 25% of the next $10 million, and 22% for the $20-$46 million band. In re Synthroid Marketing Litig.,
That being said, a fairly recent study analyzed fee awards in 689 common-fund cases spanning 18 years, reporting results that account for myriad factors, including both case type and overall fee award. See Theodore Eisenberg & Geoffrey P. Miller, Attorneys’ Fees & Expenses in Class Action Settlements: 1993-2008, 7 J. of Empirical Legal Stud. 248 (2010).
The Court is also mindful that “[a] district judge, lo.oking out for the interests of all class members, sometimes must consider issues that the class representatives and their lawyers prefer to let pass.” Silver-man,
3. Complexity, Length, and Expense
In defending their proposed award, Class Counsel emphasize the magnitude, complexity, and cost of this case as proof of their fee-worthiness. See, e.g., Synthroid I,
Most of these facts cut in Class Counsel’s favor. To be sure, this has been a long and arduous litigation, compounded by the intricacies of these particular commodities markets, the parsing of actions on a day-by-day basis over a long time period, and the inclusion of both traders and purchasers in the settlement class. Class Counsel have expended significant fees on expert work, retention of allocation counsel, and two separate mediations in order to allocate the settlement fund in a fair and reasonable manner. These facts buttress the reasonableness of Class Counsel’s request and in no way justify a reduction of the requested one-third fee. On the other hand, as Schreiber is quick to point out, a good chunk of Class Counsel’s efforts have been in conjunction with their now-dismissed claims against Schreiber, and thus played no part in reaching the settlement with DFA. But as explained in detail below, Class Counsel’s efforts in pursuing claims against Schreiber — regardless of the outcome of those claims or the influence that those efforts had on the overall settlement amount — are not a significant enough detour to overshadow the indisputably meritorious work performed here.
4. Risk
When determining the reasonableness of a fee request, courts put a fair amount of
One proxy for assessing risk is whether the litigation followed on the heels of some prior criminal or civil proceeding involving the same parties or subject matter. This inquiry provides insight into whether class counsel benefitted from the work of others, which acts a red flag for judges assessing fee petitions. See, e.g., In re Lawnmower Engine Horsepower Mktg. & Sales Practices Litig.,
Although Class Counsel undoubtedly benefitted from the CFTC’s work, they nonetheless engaged in enough proprietary legal services to distinguish their efforts from a so-called piggyback lawsuit. Indeed, Class Counsel still managed to spend (albeit by their own, unaudited calculation) 18,617.59 hours on this matter over six years, indicating that while the CFTC’s non-conspiracy-related investigation may have given Class Counsel a head start, the CFTC did not run the race for them. And although DFA’s track record surely has them high on the target list for antitrust plaintiffs’ attorneys, there is nothing indicating that DFA’s legal history has somehow awarded Class Counsel an undue benefit mandating a reduction in their otherwise reasonable fee request.
Yet another litmus test for assessing reasonableness is quality of Class Counsel’s performance in achieving the settlement — that is, whether this is the type of outcome that willing clients would have envisioned from the outset. Somewhat circularly, Class Counsel argue that the quality of their services “is best indicated by the substantial benefits Lead Counsel achieved for the Class.” [616, at 11.] The benefits they speak of include the purported two-thirds share of the $46 million settlement fund (¿Le., $30,666,666.67), plus a series of “remedial benefits,” including (a) a non-reversionary provision stating that no matter how many class members fail to submit proofs of claim, none of the settlement monies will revert to the Defendants, (b) an agreement that DFA will only transact in Class III milk futures for legitimate business purposes, and (c) a provision that DFA may not purchase or sell Chicago Mercantile Exchange Cheese Spot Call contracts unless the proposed transaction has been reviewed and approved by at least two DFA officers. The theory is that these undertakings “will impose an economic discipline on DFA’s market transactions that was lacking during the Class Period” which “should help conform and stabilize DFA’s conduct in these sensitive markets so as to reflect economic demand and supply.” [616, at 2.]
Schreiber is the only entity (or, if you prefer, class member) that objected to the fee petition, and it does not indicate whether the $30.67 million class award is above or below what the class anticipated. Hearing no other objections, and absent any other frame of reference for considering the adequacy of the monetary award, the Court is inclined to agree with Class Counsel that this award is at least adequate. However, Schreiber does object to Class Counsel’s proposition that the value of in-junctive and declaratory relief should be considered in the fee award, claiming that there is no evidence that this arguably pro forma (or boilerplate) relief is as significant as Class Counsel claim. To Schreiber’s point, it couldn’t have required much arm twisting to get DFA to agree, in writing, to act in accordance with “legitimate business purposes.” And the self-policing provision seems a rather modest punishment for a so-called serial antitrust offender. But even if the Court were to disregard these clearly hyperbolized benefits, there are still no objections before the Court explaining why the award — exaggerated or not — is anything but a satisfactory result in the eyes of the class.
6. Time Spent/Lodestar Cross-Check
A district court is under no obligation to cross-check the requested fees against the lodestar. See Williams v. Rohm & Haas Pension Plan,
But perhaps more interesting than Class Counsel’s reported reasonableness of their
It seems more likely that Class Counsel presaged the objection that Schreiber lodged shortly after counsel filed their fee petition. In that objection, Schreiber argued that Class Counsel’s fees should be measured by the lodestar method and that Class Counsel should not receive fees for any of their efforts to inculpate Schreiber into the alleged price-fixing scheme. Schreiber maligned Class Counsel’s fee request as an effort “to reduce the class’s recovery from the settlement fund in order to finance Class Counsel’s frivolous post-settlement litigation.” [619, at 1.] Schreiber requested that the petition be denied without prejudice until the case has been fully adjudicated and after Class Counsel have submitted detailed time records evincing that their fee request excludes time spent on the case against Schreiber. As a point of reference, Schreiber filed its objections to Class Counsel’s fee petition approximately three weeks before the Court granted Schreiber’s motion for summary judgment [652] and approximately six weeks before the Court declared Schreiber to be a class member [670] (ie., while Plaintiffs were still actively pursuing claims against Schreiber).
In support of its objections, Schreiber highlighted the fact that Class Counsel negotiated the amount of the settlement fund before they sued Schreiber as fodder for its argument that Class Counsel intended to use those funds to finance their claims against Schreiber. But this fact (both then and now) cuts more against Schreiber that in its favor — specifically with regard to Schreiber’s argument underpinning its Rule 11 motion for sanctions (discussed below), which is that Plaintiffs’ claims against Schreiber have always been without evidentiary support. In other words, in combination, Schreiber argues that Class Counsel expedited their settlement with DFA (disposing of their arguably meritorious claims at a potentially cut-rate price) in order to fund a satellite lawsuit — at their own expense — that they
7. Objections
Two objections were filed in response to Class Counsel’s fee petition: (1) Schreiber’s objection to the amount of the requested award [619], and DFA’s objection (fashioned as a motion for leave to respond) to a purported misstatement in Class Counsel’s reply brief in further support of their fee petition [649].
Regarding the latter objection, the Court grants DFA’s motion for leave to file a response to Direct Purchaser Plaintiffs’ reply memorandum in further support of Class. Counsel’s petition for an award of attorneys’ fees and reimbursement expenses [649]. DFA’s one-page proposed response is not a substantive objection to Class Counsel’s fee request, but rather more of a ministerial objection to an alleged misstatement of facts. Specifically, DFA offers its response “for the limited purposed of objecting to Plaintiffs’ misstatement of the contents and sequence of certain confidential settlement negotiations between DFA and Plaintiffs.” [649-1, at 1 (citing 636, at 3, 7, n.7).] The Court offers no opinion as to whether DFA’s corrections are accurate, but DFA is nonetheless permitted to voice its concerns on the record.
Schreiber, on the other hand, attacks Class Counsel’s fee request on several fronts, including the method of calculation and the overall fee request. As a threshold matter, though, Class Counsel argue that Schreiber lacks standing to object to the fee petition because it is not a member of the class. [636, at 13-14 (citing Agretti v. ANR Freight Sys., Inc.,
Complicating matters somewhat is the fact that Schreiber was still a defendant when it filed its objection on July 28, 2014[619]. It wasn’t until three weeks later, on August 18, 2014, that the Court granted Schreiber’s motion for summary judgment [652], and another month after that, on September 12, 2014, that the Court granted Schreiber’s motion declaring it a member of the class. [670, at 1 (“Schreiber is no longer a defendant in this action and, pursuant to the notice to the Class dated March 17, 2014, is fully able to participate as a Member of the Class * * *.”).] Plaintiffs added Schreiber as a defendant on March 23, 2012[248], approximately three years into this litigation, and just days after the Direct Purchaser Plaintiffs and DFA had reached their settlement agreement, at least as to the monetary component. [See 335, at 9 (“By early March 2012, Settling Defendants and the Plaintiffs had agreed to $46,000,000 as the cash consideration.”); 634, ¶ 6 (“On or about March 18, 2012, DFA agreed to the $46,000,000 cash consideration aspect of the proposed Settlement.”).]. The question, then, is whether Plaintiffs successfully stripped Schreiber of its class affiliations simply by naming it as a defendant.
Schreiber had standing to object to Class Counsel’s fee petition. First, the Court believes that Schreiber was, at least in part, a member of the settlement class at the time it filed its objection, and Class Counsel have not provided any evidence to the contrary. Because Schreiber stands to receive more' from the settlement fund if its objections are sustained, it has standing to raise them — “What more is required for standing?” Synthroid II,
Having established that Schreiber has standing to object to Class Counsel’s fee petition, the Court now turns to the substance of Schreiber’s objections. However, upon a thorough review, the Court does not find any substantive arguments raised by Schreiber that have not already been addressed above. To be sure, while Schreiber’s objections are cogently presented, its main argument (ie., that Class Counsel should not get credit for time spend pursuing claims against Schreiber) only carries weight if the Court were to apply the lodestar method of calculating fees, which it does not. The rest of Schreiber’s objections call into question the reasonableness of Schreiber’s fee request, raising many of the same points that the Court has addressed above (citing similar cases in support as well). Accordingly, the Court views Schreiber’s objections as a credible backstop for the Court’s own reasoning, but finds no unique arguments in need of further discussion or elaboration.
8. Costs
In addition to its one-third cut of the settlement kitty, Class Counsel also seek $482,749.95 in costs and expenses. See Fed.R.Civ.P. 23(h) (“In a certified class action, the court may award reasonable attorney’s fees and nontaxable costs that .are authorized by law or by the parties’ agreement.”). It is the Court’s duty to ensure that the expenses are reasonable, whereby “[i]f counsel submit bills with the level of detail that paying clients find satisfactory, a federal court should not require more.” Synthroid I,
In their original petition, Class Counsel requested $487,881.24 in expenses, itemized (with little detail) in the declaration of Christopher M. McGrath [615]. Mr. McGrath made clear that Class Counsel were not seeking any expenses related to their work in connection with the prosecution of Plaintiffs’ claims against Schreiber after December 24, 2012. Two weeks later — likely in response to Schreiber’s objection that Class Counsel failed to provided sufficient documentation justifying their expense request [see 619, at 14 (citing Schulte,
1.Legal Standard
Following its victory on summary judgment, Schreiber filed a bill of costs seeking reimbursement of litigation costs as a prevailing party. Rule 54(d) says that “[u]nless a federal statute, these rules, or a court order provides otherwise, costs — other than attorney’s fees — should be allowed to the prevailing party.” Fed.R.Civ.P. 54(d). Rule 54(d) creates a strong presumption in favor of awarding costs to the prevailing party. See Weeks v. Samsung Heavy Indus. Co., Ltd.,
2.Stay Pending Appeal
As a preliminary matter, Plaintiffs argue that the Court should stay its decision regarding the bill of costs pending resolution of Plaintiffs’ appeal of this Court’s order granting summary judgment in Schreiber’s favor. Plaintiffs argue that a stay is appropriate because there is an issue of first impression before the Seventh Circuit: “what does the term ‘commodity underlying’ a futures contract mean for purposes of a private right of action under Section 22(a) of the Commodity Exchange Act, 7 U.S.C. § 25.” [700, at 14-15 (citing George v. Junior Achievement of Cent. Ind., Inc.,
3.Schreiber’s Right to Amend Its Bill of Costs
Plaintiffs raise a second threshold argument by claiming that Schreiber had no right to submit an amended bill of costs, and thus the Court should strike Schreiber’s initial filing as improper and ignore its corrected filing as untimely. Local Rule 45(a) gives a party 30 days to file a bill of costs, where any costs not filed
4. Taxable Charges
The Court “may not tax a prevailing party’s costs to the losing party under Rule 54(d) unless the specific expense is authorized by a federal statute.” Little v. Mitsubishi Motors N. Am., Inc.,
Schreiber seeks $775.00 in fees for service of subpoenas, $30,500.13 in transcript fees, and $940.10 in copy fees. These are all taxable under § 1920. However, digging deeper into the itemized charges on the relevant invoices, Plaintiffs allege that there are certain sub-categories of charges that are not taxable.
First, Schreiber seeks $4,740.75 in “Realtime” (i.e., live transcript fee) charges associated with its transcript costs. Such fees have been deemed nontaxable because the service is for “the mere convenience” of the attorneys. See SP Techs., LLC v. Garmin Int’l, Inc.,
Second, Schreiber seeks $4,400.00 for video charges and $130.00 in processing and handling charges associated with video recordings of depositions. Plaintiffs object to the video charges, even though it was Plaintiffs’ decision to have the depositions in question video-recorded. And under Seventh Circuit precedent, if a deposition is video-recorded, Rule 54(d) permits an award of costs “of both video-recording .and stenographic transcription to be taxed to the losing party.” Little,
Third, Schreiber seeks $932.10 in exhibit charges, $525.00 in handling/proeessing charges, $429.00 in E-CD litigation package charges, and $55.00 for miniscripts. Regarding the handling/processing charges, the Seventh Circuit has already held that such incidental costs are taxable. See Finchum,
Fourth, in a similar vein, Plaintiffs object to additional transcript-related costs that they arranged for and Schreiber adopted: $5,995.48 in expedited charges, $2,932.80 in rough draft charges, and $740.00 in evening charges. For the reasons stated above, the Court also deems these charges taxable. See Finchum,
5. Transcript Copies
Plaintiffs agree that § 1920 allows for the taxing of transcript copies, but they argue that Schreiber’s rates exceed the maximum allowable rates in this district. Per this District’s General Order 12-0003, approved transcript rates range from $3.65 to $7.25 per page, depending on delivery time, and parties can recover between $.90 and $1.20 for copies of transcripts. First, Plaintiffs argue that all of Schreiber’s transcript costs are for copies, not origi
C. Schreiber’s Motion for Rule 11 Sanctions
Schreiber seeks Rule 11 sanctions against Plaintiffs for “submitting factual contentions in their pleadings and other papers lacking in evidentiary support, as required by Rule 11(b)(3).” [676, at 1.]
1. Direct Purchaser Plaintiffs’ Motion for Leave to File Surreply
Before addressing Schreiber’s motion for sanctions, the Court must determine the relevant world of memoranda to consider in deciding that motion. Specifically, Plaintiffs moved this Court for leave to file a surreply [703] relating to the Rule 11 issue, as well as a motion to file that surreply under seal [701], Plaintiffs’ surreply is currently under seal on the Court’s docket at [703-1]. The decision whether to grant a motion for leave to file a surreply is within the Court’s discretion. Johnny Blastoff, Inc. v. L.A. Rams,
Plaintiffs argue that their surreply is warranted for three reasons: (1) to allow Plaintiffs to address a new argument that Schreiber made for the first time in its reply brief, (2) to correct “gross mischaracterizations” in Schreiber’s reply brief, and (3) to provide the Court with a matrix to assist in reviewing certain relevant evidence. The first two reasons are, if meritorious, grounds for allowing the surreply — see Univ. Healthsystem Consortium,
Even a quick glance at Plaintiffs’ surre-ply is enough to show that Plaintiffs’ aim was not to correct errors in Schreiber’s reply brief, but rather to respond (again) to Schreiber’s core arguments. Indeed, Plaintiffs spend seven of the eight pages of their brief responding to Schreiber’s argument that certain of Plaintiffs’ allegations against it were “utterly void of support,” whereby Plaintiffs (again) attempt to temper these accusations by providing contrary evidence. Of course it is not uncommon for adverse parties to feel that their opponent’s briefs are replete with “gross mischaracterizations,” and it would be unjust to allow Plaintiffs to rebrand Schreib
Plaintiffs also attach five exhibits to their proposed surreply, consisting of four documents that they cited but did not attach to their response brief and a summary chart laying out the location in the record of evidence cited in exhibit 1 to Plaintiffs’ opposition to Schreiber’s Rule 11 motion. While Plaintiffs should have attached these exhibits to their opposition brief, the Court finds the exhibits useful in reviewing the merits of Schreiber’s motion, and will consider them.
Thus, Plaintiffs’ motion for leave to file a surreply [703] is granted in part and denied in part: the Court grants Plaintiffs leave to file only exhibits A through E of its proposed surreply (i.e., not the surreply itself). Plaintiffs’ motion to file its surre-ply under seal [701] is granted in part and denied as moot in part, such that exhibits A through E of Plaintiffs’ surreply may remain under seal. Plaintiffs need not refile the exhibits on the docket; the Court will review and consider the documents as already provided. [See 703, ex. 1, exs. AEJ
2. Timeliness
Plaintiffs argue that Schreiber’s motion for sanctions is untimely because Schreiber filed it approximately 30 months after Plaintiffs sued Schreiber [245], and approximately 28 months after Schreiber first provided notice to Plaintiffs that their allegations violated Rule 11 [see 688, ex. A (letter from Schreiber’s counsel to DFA’s counsel, dated May 9, 2012)]. Plaintiffs add that Schreiber objects to comments that Plaintiffs made in their opposition to Schreiber’s motion to dismiss [290], which was filed and ruled upon approximately two years ago.
Parties must request Rule 11 sanctions “as soon as practicable after discovery of a Rule 11 violation.” Kaplan v. Zenner,
The purportedly violative conduct at issue here concerns Plaintiffs’ allegedly baseless allegations of wrongdoing against Schreiber as set forth in their second amended complaint [245], which Plaintiffs filed on March 22, 2012. Schreiber cites to similarly offensive statements in Plaintiffs’ opposition to Schreiber’s motion to dismiss [290] as illustrative of their continuing sanctionable conduct, but Schreiber focuses almost exclusively on Plaintiffs’ complaint as the core violation. Schreiber first provided notice to Plaintiffs of its intent to file a Rule 11 motion on May 9, 2012 [688, ex. A],
Rule 11 includes a 21-day safe harbor, which says that a party seeking sanctions must inform the alleged offender 21 days prior to filings in order to give the alleged offender an opportunity to withdraw the purportedly false statement. Fed.R.Civ.P. 12(c)(2). Plaintiffs argue that “[a] motion for sanctions served after an allegedly offending paper has been ruled upon defeats the purpose of Rule ll’s safe harbor.” [687, at 3 (quoting Zahran v. Nat’l Guardian Life Ins. Co.,
The Court must decide whether giving notice approximately two weeks after the release of the offending paper but filing the motion two-and-a-half years later, after the offending paper has been ruled upon, is reasonable. “Reasonableness is necessarily dictated by the specific facts and circumstances in a given case.” Kaplan,
3. Rule 11 Sanctions
Rule 11(b) requires an attorney to certify, to the best of his or her knowledge, that any pleading that the attorney presents to the court is not being presented for any improper purpose — such as to harass, cause unnecessary delay, or
“The decision to impose sanctions is left to the discretion of the trial court in light of the available evidence,” and “[t]he application of Rule 11 to the facts and circumstances of a particular case is an exercise of the trial court’s discretion, which [is] reviewed for abuse of discretion.” Divane v. Krull Elec. Co., Inc.,
To assess the reasonableness of a party’s inquiry into the factual basis of its claims, the test is whether “competent attorneys performing a reasonable investigation could not have believed in the merit of the position taken in the complaint.” Id. Courts also look to a number of other factors, including: “whether the signer of the documents had sufficient time for investigation; the extent to which the attorney had to rely on his or her client for the factual foundation underlying the pleading, motion or other paper; whether the case was accepted from another attorney; the complexity of the facts and the attorney’s ability to do a sufficient pre-filing investigation; and whether discovery would have been beneficial to the development of the underlying facts.” Brown v. Fed’n of State Med. Bds.,
Schreiber details nine specific statements in Plaintiffs’ complaint as examples of how Plaintiffs lacked an evidentiary basis for bringing claims against Schreiber.
4. Fees
Under Rule 11(c)(2), “the court may award to the prevailing party [to a motion for sanctions] the reasonable expenses, including attorney’s fees, incurred for the motion.” Fed.R.Civ.P. 11(c)(2). Plaintiffs have not requested fees at this point, but
III. Conclusion
For the foregoing reasons, the Court grants Class Counsel’s fee petition [613], awarding them one-third of the $46 million common fund ($15,333,333.33) with interest thereon at the same rate paid on the Settlement Fund, plus $488,491.24 in costs and expenses. The Court grants DFA’s motion for leave to file a response to Direct Purchaser .Plaintiffs’ reply memorandum in further support of Class Counsel’s fee petition [649]. The Court denies Schreiber’s motion for Rule 11 sanctions [676]. The Court grants in part and denies in part Direct Purchaser Plaintiffs’ motion to file a surreply [703] and Direct Purchaser Plaintiffs’ motion to file exhibit 1 to their surreply under seal [701], granting Plaintiffs leave to file only the exhibits to their motion to file a surreply, which will remain under seal on the Court’s docket as currently filed. Finally, the Court grants Schreiber’s bill of costs [694], and awards them $32,215.23 plus interest, although enforcement of this award is stayed pending resolution of Plaintiffs’ appeal of this Court’s order granting summary judgment in favor of Schreiber.
Notes
. "MDL courts have consistently cited the common fund doctrine as a basis for assessing common benefit fees in favor of attorneys who render legal services beneficial to all MDL plaintiffs.” In re Vioxx Prods. Liab. Litig.,
. See also Notice of Partial Settlement § V(A), available at http://dairyfarmersdirect purchaseraction.com/Portals/O/Documents/ DFA.Long.Form.Notice.pdf ("As compensation for their time and their risk in prosecuting the litigation on a wholly contingent fee basis for three-plus years, Lead Counsel will ask the Court for an award of attorneys’ fees in the amount of one-third of the Settlement Fund, as a common fund, and for reimbursement of their costs and expenses in the amount of no more than $600,000.00 — all to be deducted from the Settlement Fund.”).
. See also Heekin v. Anthem, Inc.,
. The Court is aware that lower-percentage awards are common in so-called '"mega-cases,” including larger MDLs with settlement funds exceeding $100 million. See, e.g., In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions,
.Available at http://www.uscourts.gov/ uscourts/RulesAndPolicies/rules/Duke% 20Materials/Library/Theodore%20Eisen-berg,% 20Geoffrey% 20Miller,% 20Attorneys% 27% 20Fees% 20in% 20Class Actions.pdf
. Plaintiffs claim that December 24, 2012 is the date on which DFA signed documents agreeing to settle.
. Plaintiffs note that the risk multiplier including the fees during the "Reduction Period” would be 1.46, reflecting the fact that the fees incurred pursing claims against Schreiber amounted to less than 10% of the total toted up by Class Counsel during the almost six years since the filing of this litigation. [See 636, at 13.]
. To be sure, the financial gain to Schreiber from the settlement is offset, • at least from Schreiber’s perspective, by the cost of the litigation, both financial and otherwise, and thus the Court could only speculate whether Schreiber views the end result as positive, negative, or neutral. But setting aside those costs, as the largest member of the class certified for settlement purposes, Schreiber’s and Class Counsel's interests were aligned at least in regard to maximizing the amount of the settlement distributions to the class members.
. -The Court expressed its concerns about Plaintiffs’ attempt to exclude Schreiber from the settlement class on several occasions, highlighting Schreiber's "dual role as a defendant in the litigation and (at least by its reckoning) a putative absent member of the prosed class,” and noting that "[e]ven if Plaintiffs could survive summary judgment on their claims regarding the conspiracy in May through June 2004, Plaintiffs have not sufficiently explained their justification for excluding Schreiber from the class period with respect to the second manipulation period.” [424, at 2.]
. Even if Schreiber did not have standing to object, the Court has an independent obligation to scrutinize the proposed fee arrangement in this matter and, in all likelihood, would have considered most, if not all, of the issues raised in Schreiber's objections.
. Some of the itemized-expense requests arguably fall short of the specificity required for the Court to make a meaningful assessment. Specifically, the declaration of Martin Miller on behalf of Miller Law LLC requesting $2,259.37 in expenses [634, ex. B] and the declaration of Geoffrey Horn on behalf of Lowey Dannenberg Cohen & Hart, P.C. requesting $505.80 in expenses [634, ex. E] list expenses in bulk categories without any internal itemization. In addition, the Court found no support for the $164.45 requested by Fink-
. Because the Court is staying the enforcement of the bill- of costs, interest will not accrue from the date the cost award is entered, see McIlveen v. Stone Container Corp.,
. The Court’s decision to exercise its discretion to permit Schreiber to amend its Bill of Costs is akin to its similar decision to permit Class Counsel to submit a supplemental declaration in support of their request for expenses. In both instances, the revised filings better allowed the Court to fairly and accurately assess each side’s entitlement to the claimed amounts.
. Schreiber satisfied Rule ll’s notice provision by sending a letter to Plaintiffs in which Schreiber identified the offensive statements and requested that Plaintiffs withdraw the
. Schreiber did not send Plaintiffs separate Rule 11 notices after each repeat offense. However, nearly all of Schreiber's objections are to statements that Plaintiffs made in their second amended complaint, and Schreiber makes reference to Plaintiffs’ subsequent offenses only as ancillary support for its core objections (i.e., not as independent Rule 11 violations). [See 676, at 4 and n.2 (referencing Plaintiffs’ allegations in its opposition to Schreiber’s motion to dismiss).] Under these circumstances, the Court deems Schreiber’s objection procedures to be reasonable, and thus procedurally appropriate.
. While Schreiber cites to these nine specific examples, it argues that Plaintiffs’ second amended complaint is replete with unsupported accusations, and that Plaintiffs' central claim that Schreiber conspired with DFA and Keller’s Creamery to manipulate the price of milk futures is completely meritless. As such, while, the Court reviews Schreiber's specific examples in detail, it also reviews Schreiber’s Rule 11 motion in light of Plaintiffs’ complaint as a whole. That being said, the Court is mindful that even a single misrepresentation can form the basis for a Rule 11 sanction, even though Plaintiffs’ complaint contains other formally correct statements or is, on the whole, plausible. Frantz v. U.S. Powerlifting Fed'n,
. To refute Schreiber’s nine specific examples of sanctionable conduct, Plaintiffs produced a 12-page, single-spaced exhibit laying out specific evidentiary bases for each of the nine allegations at issue. [6871.] The Court shares Schreiber’s frustration over the lack of context in Plaintiffs' chosen rebuttal format (i.e., isolated bullet points without explanation or accompanying exhibits). Nonetheless, upon careful review, while the evidentiary excerpts do not provide smoking-gun evidence for Plaintiffs’ allegations, the Court is persuaded that Plaintiffs were not following an imaginary trail of bread crumbs in continuing to investigate their claims against Schreiber.
. "The focus in Rule 11 sanctions is on what counsel knew' at the time the complaint was filed, not what subsequently was revealed in discovery.” City of Livonia Emps. ’ Retirement Sys. v. Boeing Co.,